Wharton Properties Faces Foreclosure at 15 West 34th Street Over $20M Loan

Jeff Sutton’s Wharton Properties has been hit with a pre-foreclosure filing at one of its Manhattan retail spots.

Wharton, along with co-owners Gindi Capital and brand investor Steven Russo, is facing foreclosure at the 10,595-square-foot retail condominium at 13-15 West 34th Street after defaulting on a $20.3 million loan for the property, according to a Tuesday filing by lender TD Bank in New York County Supreme Court.

TD Bank claimed that Sutton and brothers Eli and Jeffrey Gindi fell into default in April and owe $17.8 million on the loan, according to the filing. The lender also alleged that Sutton and the Gindis had four extensions of the loan’s maturity date since 2018.

Sutton and spokespeople for Gindi and Russo could not be reached for comment.

The Midtown South retail condo between Fifth Avenue and Avenue of the Americas was most recently home to apparel retailer Zumiez, but the company has since vacated the space, according to PincusCo.

Sutton and his co-owners acquired the property in 2001 for an undisclosed amount, according to Crain’s New York Business, which first reported the news of the foreclosure. In 2013, TD Bank provided $300,000 in gap financing and consolidated J.P. Morgan Chase’s original $20 million loan, Crain’s reported.

The retail unit is at the base of the eight-story building, which sits across 34th Street from the Empire State Building and is home to office tenants, including computer software store Pentagon 2000 Software and clothing importer Spectra Private Brands.

News of the foreclosure comes as retail on the West 34th Street stretch remains challenged following the COVID-19 pandemic, with declining rents and higher taxes forming challenges for landlords.

As a result, several tenants have vacated their 34th Street retail units since the pandemic, including American Eagle, Banana Republic and Victoria’s Secret, PincusCo reported.

Isabelle Durso can be reached at idurso@commercialobserver.com.